TMI Blog2014 (4) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... working under old premises and later shifted to present premises. Furthermore, premises were not registered thus inviting deeming provisions of Chewing Tobacco & Unmanufactured Tobacco Packing Machine (Capacity Determination and Collection of Duty) Rules, 2010. - Appeal No.E /56939-56940/2013 - - - Dated:- 31-12-2013 - Archana Wadhwa and Manmohan Singh, JJ. For the Appellant : Shri Manish Agarwal, CA. For the Respondent : Shri S K Panda, JCDR JUDGEMENT Per: Archana Wadhwa, Member (J).: Both stay petitions are being disposed of by a common order as they arise out of the same impugned order passed by the Commissioner vide which he has confirmed duty of Rs.3,17,41,935/- against M/s. Goyal Tobacco Co. Pvt. Ltd. alongwith confirmation of interest. In addition penalty of identical amount stands imposed on the said appellant and penalty of Rs.50 lakhs stands imposed upon Shri Rajesh Goyal, Director of M/s. Goyal Tobacco Co. Pvt. Ltd. 2. After hearing both sides duly represented by Shri Manish Agarwal, CA for the appellants and Shri S.K.Panda, ld. JCDR for the Revenge and after going through the impugned order, we find that M/s. Goyal Tobacco Co. Pvt.Ltd. is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... working condition, they cannot be held liable to pay huge demand of around more than Rs.3 crores. 5. The Commissioner in his impugned order, dealt with said plea of the appellants and observed that panchnama dated 18.1.11 drawn at the time of visit of the officers did not provide any details about condition of machines and complete/incomplete position of the same. It was recorded in the panchnama that out of 3 machines, in one machine the light was blowing and packing rolls was available on the machines. He also referred to the subsequent panchnama dated 13.7.2011 during which photograph of the machines was taken and status of the availability of various parts in the said 3 machines was recorded in the panchnama. After considering the same, the Commissioner observed as under para 99: 99. So far as the condition of the machines is concerned, the photographs and panchnama dated 13.7.2011 taken/recorded in the presence of the departmental officers cannot be disputed. In view of the fact that some of the essential parts in the machines were missing and in absence of recovery of these missing parts from the premises it can actually be argued that the said machines were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... city socket, it cannot be held that such machine was in non-working condition throughout the period, though there was no motor in the said machines. He also referred to the capacity determination Rules, 2010 and has observed that by deeming fiction of law machine in question, it is required to be held that during financial years, in dispute, the same were used in the manufacture of final products. However, we find that the premises from where 3 packing machines were recovered, were neither registered premises nor was adjacent to the factory, admittedly engaged in the manufacture of final products. The provisions relied upon by the adjudicating authority, creates a deeming fiction in respect of packing machine installed in the factory engaged in the manufacture of tobacco products. The production capacity of the factory has to be arrived at on the basis of number of packing machines installed therein. Does it mean that wherever some packing machines are found in non-working condition and dumped therein, such deeming fiction so created by the capacity determination Rules has to be applied? If that be so, all the old, used and obsolete non-working packing machines, found anywhere, hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e missing and in absence of recovery of these missing parts from the premises it can actually be argued that the said machines were not in working condition, on the date of their seizure i.e. 18.1.2011. From comparative study of the photographs of the machines and panchnama dated 18.1.2011, it is interesting to note that the machine which was alleged to be found plugged-in does not have motor in it, thus any argument that this particular machine was in working condition on 18.1.2011 is also too specious as it cannot be explained as to why a machine claimed to be scrapped should be plugged into the electric socket. Obviously it was a condition that motor could be attached anytime to run this machine. However, it may be mentioned that it would be rather too much to suggest that photographs and physical status of the seized machines can prove that the machines were out of order from 8.3.2010. Thus photographs and physical status can be indicative of condition of machines at a given time i.e. to say on 18.1.2011, but cannot provide absolute evidence that they were out of order even since 8.3.2010. Moreover the missing parts of the machines can always be attached to the machines to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, all the works related to that firm such as sales and purchase were carried out by him. Office of this firm was situated at 324, Triploa Bazar and godown was situated at 269, Govind Nagar East. All the activities were carried out under his instructions and Shri Dinesh Jogi son of Shri Om Prakash and Rakesh Kumar son of Shri Nanak Ram worked there under his instructions and sometime prepared Laxmi brand unmanufactured tobacco MRP Rs.2 pouches on one machine in our said premises. There were three pouch packing machines out of them one machine belonged to Unitek Packing System Pvt.Ltd., New Delhi and second one belonged to M/s. Sharma Engineering Works, Delhi and third one was assembled. 17. I have also perused the statement of Smt. Pratibha Goyal, wife of Rajesh Goyal, wherein she admitted that their company M/s. Goyal Tobacco co. was manufacturing branded unmanufactured branded tobacco bearing 'Laxmi chhap brand' and they were manufacturing pouches of Rs.2/- per pouch and Rs.4 per pouch. She also stated that manufacturing and supplying of finished goods was looked after by Shri Harish and son of Late Shri M Ram who was their accountant. She also admitted that she was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Kothi, Ramgarh Mode, Jaipur. These goods were manufactured on the instruction of Pramod Ji by labour, whose name was Dinesh,. 22. On further inquiry, it came out that this tobacco packing work was going on from 4-5 years. This packing work was being done in the guidance of Shri Shyam Babu Goyal who also participated in packing work. Other labours did packing work on the instruction of owner at hall situated in plot 269, Govind Nagar East. There were three automatic pouch packing machines and one mixture machine over which chewing tobacco was mixed and filled in pouches and packed through automatic machine. This work was carried out by automatic machine at 269, Govind Nagar East and work was going on for 3-4 years. 23. Presence of machines in the hall was admitted by Rajesh Goyal though later he retracted his statement however, such retraction has no advantage and content of his statement were further ratified and confirmed by his wife Smt.Pratibha Goyal and Shri Pramod Kumar, accountant/production manager and Shri Harish Sharma. Self convicting statements are best piece of evidence. Presence of these machines in the hall is prima facie established and deeming fiction creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reported on --------------- Subject to deposit, remaining amount of duty and penalty shall remain waived till disposal of the appeal. Archana Wadhwa and Manmohan Singh Difference of Opinion Whether as per findings of learned Member (Judicial), full waiver of pre-deposit is to be granted in view of the facts that machines were not in working condition based on commissioner's observation in para 99 in his adjudication order and provisions of deeming fiction was not attracted as per Chewing Tobacco Unmanufactured Tobacco Packing Machine (Capacity Determination and Collection of Duty) Rules, 2010. Or Whether as per findings of Member (Technical), partial pre-deposit of Rs.One crore is to be ordered based on the findings that there was clear admittance by Shri Rajesh Goyal, director, his wife and other key personnel such as manager and accountant of manufacture and running of machines. Further it is also a fact on record that these machines were earlier working under old premises and later shifted to present premises. Furthermore, premises were not registered thus inviting deeming provisions of Chewing Tobacco Unmanufactured Tobacco Packing Machine (Capac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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